Investment Highlights

• We maintain our HOLD recommendation on Bursa Malaysia (Bursa) with an unchanged fair value of RM6.80/share, pegging the stock to FY23F P/E of 22x, on par to its 5-years historical average.

• No changes to our earnings estimate and our 3-star ESG rating.

• The Government has announced a reduction in stamp duty from 0.15% to 0.10% on the transaction value of securities subject to a maximum cap of RM1,000 per contract for shares traded on Bursa Malaysia.

• The lower stamp duty will be effective from July 2023.

• Exhibit 1 shows the impact of the lower stamp duty on the transaction cost to investors. This is based on our assumption of a brokerage fee of 0.3%, revised stamp duty of 0.1% or max RM1,000 per contract and clearing fee of 0.03% or max RM1,000 per contract on the transacted value.

• The difference on a transaction value of RM10,000 is minimal with savings of RM5 (-10.4%) while for a higher contract value of RM100,000, the impact will a reduction of RM50 (-10.4%). In the case of a contract value of RM1mil, there will not be any difference before and after as stamp duty will be capped at RM1,000 per contract.

• Overall, the measure is seen as mildly positive for equity trading and volume. The impact on institutional trade is likely to be muted as the 0.05% difference in stamp duty is not expected to trigger a surge in trading activities given the absence of a significant inflow of foreign funds presently into the securities market.

• Meanwhile, on retail investors, sentiment could improve slightly but would still depend largely on key market catalysts and active trading by institutional investors before seeing trading participation rise.

Source: AmInvest Research - 20 Jun 2023